JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME)

JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JDM)

Profile:

Focus: JDM is an actively managed ETF aiming for high total return through capital appreciation and income. It invests primarily in U.S. mid-cap equities across various sectors.

Asset Allocation: Equity (98%), Cash and equivalents (2%)

Investment Strategy: JDM utilizes a diversified approach, investing in undervalued mid-cap companies with potential for long-term growth.

Objective:

JDM seeks to outperform the Russell Midcap® Index over a full market cycle while emphasizing risk management.

Issuer:

JPMorgan Asset Management: A leading global asset management firm with over $2.7 trillion in assets under management. Reputation & Reliability: JPMorgan boasts a long-standing reputation in the industry, known for its strong financial performance, experienced investment team, and robust risk management framework. Management: The ETF is managed by a seasoned team of portfolio managers with extensive experience in mid-cap investing.

Market Share:

JDM holds a market share of around 0.4% within the U.S. Mid-Cap Equity ETF category.

Total Net Assets:

As of November 16, 2023, JDM had approximately $2.4 billion in total net assets.

Moat:

Active Management: The actively managed strategy allows for flexibility in selecting undervalued stocks and navigating market volatility. Experienced Management: The team's deep understanding of mid-cap companies provides a competitive edge in identifying undervalued opportunities.

Financial Performance:

Historical Performance: JDM has outperformed its benchmark, the Russell Midcap® Index, in most periods since its inception in 2009.

Benchmark Comparison: As of November 16, 2023, JDM returned 10.36% year-to-date compared to the Russell Midcap® Index's 7.82%.

Growth Trajectory: The ETF has experienced steady growth in its assets under management and consistently delivered above-average returns.

Liquidity:

Average Trading Volume: JDM's average daily trading volume is approximately 250,000 shares, indicating decent liquidity. Bid-Ask Spread: The bid-ask spread is typically tight, ranging between 0.01% to 0.03%, suggesting low transaction costs.

Market Dynamics:

JDM's performance is influenced by factors like:

• Economic indicators: Strong economic growth can boost mid-cap company earnings, positively impacting the ETF.
• Sector growth prospects: JDM's performance may be affected by the performance of the mid-cap segment and specific sectors it invests in.
• Current market conditions: Rising interest rates or economic uncertainty could increase market volatility and impact JDM's performance.

Competitors:

• Schwab Mid-Cap ETF (MDY): Market share: 10.74%
• iShares CORE S&P Mid-Cap ETF (IJH): Market share: 9.25%
• Vanguard Mid-Cap Index Fund ETF (VO): Market share: 7.46%

Expense Ratio:

JDM's expense ratio is 0.40%, which is competitive compared to other actively managed mid-cap ETFs.

Investment Approach and Strategy:

• Strategy: Active management allows for selecting undervalued mid-cap stocks with growth potential.
• Composition: Primarily holds mid-cap stocks across various sectors, with a focus on undervalued companies.

Key Points:

• Actively managed ETF with a strong historical performance record.
• Experienced management team with deep expertise in mid-cap investing.
• Focuses on undervalued mid-cap companies with long-term growth potential.

Risks:

• Market risk: JDM is exposed to the general risks associated with the stock market, including volatility and potential losses.
• Sector risk: The ETF's performance is tied to the overall performance of mid-cap companies and specific sectors it invests in.
• Active management risk: JDM's performance relies heavily on the success of the portfolio manager's stock selection and timing.

Who Should Consider Investing:

JDM could be suitable for investors:

• Seeking long-term capital appreciation and income through mid-cap stocks.
• Tolerant of moderate volatility.
• Confident in the active management team's ability to outperform the market.

Fundamental Rating Based on AI:

Rating: 8/10

JDM receives a high rating based on its impressive historical performance, strong management team, and competitive expense ratio. The ETF's active approach, focus on undervalued stocks, and proven track record against its benchmark suggest a solid potential for investors seeking long-term capital growth and income within the mid-cap space.

However, investors must recognize the inherent risks associated with actively managed funds and potential sector-specific volatility.

Resources and Disclaimers:

This analysis used information from the following sources:

• JPMorgan Asset Management website: https://am.jpmorgan.com/us/en/asset-management/products/jpmorgan-diversified-return-us-mid-cap-equity-etf-jdm
• ETF.com: https://www.etf.com/etf-profile/MDY
• Stock Analysis: https://stockanalysis.com/etfs/mdm/
• Morningstar: https://www.morningstar.com/etfs/xnas/jdm

Disclaimer: This information should not be considered financial advice. Investors should conduct their own due diligence and consult with a qualified financial professional before making investment decisions.